Hey millennials: Time to start spending already!

The workforce's newest generation is sharing striking similarities to those who came of age during the Great Depression.

If millennials don't break out of this frugal state of mind, the trend could create challenges for the stock market and retail spending.

Craig Warga | Bloomberg | Getty Images

Recent data suggest millennials—born between the early 1980s and mid-1990s—are succumbing to the pressures of the uncertain economy by being more conservative with their money and more proactive with their careers than previous generations.

It appears the youngest Americans are shunning big material purchases and keeping their money in cash, while fiercely trying to get a leg up on the competition by locking in internships earlier and earlier.

First up: The recent UBS Investor Watch survey, which found that millennials are behaving more like their Depression-era grandparents and great-grandparents.

The research suggests millennials aren't living up to the stereotypes of being entitled, narcissistic and digitally obsessed. Instead, they collectively believe hard work and limited spending are the keys to financial success.

Emily Pachuta runs the team that conducted the survey, which was designed to help the firm's financial advisors better understand this generation and put together strategies to meet their needs.

"When you hear Depression-era mindset, a few things come to mind: frugal and very hard working," said Pachuta, head of investor insights for UBS Wealth Management. "What is interesting is that millennials are holding even more cash than their parents or Generation X. … Cash is what makes them feel more secure."

This habit of being financially conservative with a propensity to save is a very generational-defining attribute, Pachuta said. Most millennials aren't chasing stock market returns because they watched their parents' portfolios getting rocked by the financial crisis.

(Read more: Businesses already see the middle class eroding)

CivicScience, which conducts three-question polls on hundreds of websites, ran a survey last week on millennials—a group that is about the same size as the vast boomer generation—at CNBC's request.

The data mining and polling company found millennials are more likely to use a savings account primarily and less likely to use IRAs or combine multiple investment strategies than their older peers. (See chart.)

Carleton English of Philadelphia, a 30-year-old with a professional background in financial services and wealth management, thinks it's possible the conservative mindset could change over time.

"Hopefully, the economy continues to pick up and millennials pay off a big chunk of their student loan debt. When they have more of a cash cushion, then maybe they will be less risk averse," English said.

Similar to her counterparts, English, who led financial literacy seminars for young adults in Seattle from 2008 until 2012, said she feels more comfortable putting off big purchases, buying just what she needs, and holding cash.

It appears this trend extends to those born during the late 1990s, otherwise known as Generation Z.

A survey out this month, conducted by Millennial Branding and Internship.com, found high school students are now more career-focused than college students. Half of the 326 companies surveyed, which were mostly small businesses, are creating high school internship programs this year.

Even though the survey didn't address whether the internships were paid, Millennial Branding founder Dan Schawbel doesn't think this is an issue. He believes the results confirm millennials are more goal-oriented than previous generations to ward off economic setbacks later in life.

"After pressure from their parents, the economy was the biggest factor in terms of why they are already thinking of their careers in high school," Schawbel said.

He added that young Americans don't want to delay adulthood and live at home after college.

They want to be as prepared as possible to be independent and financially sound—even if that means starting internships earlier and being extremely disciplined with their finances.